2.11.3  Transfer of Development Rights

Situations may arise where a limitation on the use of land, imposed for the public good, inflicts an economic impact on a landowner that, while not confiscatory, is so substantial as to prompt the government to provide some type of compensation. A transfer of development rights (TDR) program can accomplish this objective by permitting the transfer of development rights from the burdened property (the "sending parcel") to certain other properties (the "receiving property") in the political subdivision. A TDR has value because the owner of the right is permitted to develop at greater than normal intensity at the receiving property. In this way farmers can get compensated for the loss of revenue they might be exposed to if regulations limit the development value of their land. Thus, a TDR program for preserving farmland can avoid the takings issue discussed in Section 3.